Opening Doors: Inside the World of Museum Management

In 1995, Boston's Museum of Fine Arts reopened its grand front entrance on busy Huntington Avenue. The symbolism was hard to miss. After decades of attracting a scholarly, sophisticated, highbrow crowd to its side entry, the MFA was opening its doors to a wider audience. While other efforts may not be quite so literal, museums across the country are working hard to shed their stodgy images and appeal to a broader spectrum of visitors with blockbuster exhibitions, well-stocked gift shops, remodeled cafés, and, in some cases, even singles happy hours. Extensive marketing campaigns are apparent when a Philadelphia museum runs a full-page ad in the New York Times, a Boston bus is swathed in a van Gogh image, and a Chicago cab receipt invites you to visit that city's Museum of Contemporary Art.

Merchandising know-how and advertising savvy are but two of the myriad skills that are required of today's museum manager. Traditionally, museums have been run by academics who worked their way through the curatorial ranks, but more and more museum trustees are putting their faith in people with management skills to oversee daily operations of their complicated, not-for-profit institutions. "The job of running a museum is much bigger and broader than it once was," observes HBS marketing professor emeritus Stephen A. Greyser, an expert on nonprofit management who is a longtime museum observer and board member. "A good director will harness the great capability of the museum's curators and its collection while also maintaining an umbrella identity for what the museum is doing as a whole."

Not for Profit

While its IRS designation 501(c)(3) connotes a not-for-profit status, New York's Metropolitan Museum of Art, with an annual operating budget of $200 million, finds the challenge of functioning with a break-even bottom line to be considerable. Deborah M. Winshel (MBA 1985) spent thirteen years at J.P. Morgan before putting her skills to work as SVP and CFO at the Met. She now works for Met president David McKinney and CEO Philippe de Montebello, a 37-year veteran of the Met. "We have a strong, diverse, unpredictable revenue base, and the financial demands of running an institution this size are considerable," says Winshel. "We have a not-for-profit revenue stream, but we also have many of the escalating costs of a commercial operation."

"Big budget museums don't have a lot of financial leeway," adds HBS professor William J. Poorvu, treasurer and trustee of the Isabella Stewart Gardner Museum, who has written a case about this quirky Boston treasure. Poorvu notes that the pressure on museums is intense when a mere 2 percent deficit in a $50 million budget is $1 million, a number that "is completely unacceptable in the nonprofit realm."

The fundraising and financial aspects of their jobs, say the HBS MBAs who were interviewed for this article, are often the most challenging. "It can be discouraging when you have an incredibly creative person with a great idea, and you can't find the money to fund it," notes Vicki Wilson (MBA 1985), CFO of the Museum of Contemporary Art (MCA) in Chicago. Her colleague down Michigan Avenue, Field Museum of Natural History president and CEO John W. McCarter, Jr. (MBA 1963), agrees completely: "The only thing slowing us down is lack of resources," says McCarter, who spends about 20 percent of his time raising money. McCarter's counterpart at the Smithsonian's National Museum of Natural History (NMNH), Robert W. Fri (MBA 1959), observes that even though several days of his week are devoted to fundraising, "it never feels like enough."

Education and Outreach

Education is a central element in any museum's mission statement. How each museum chooses to fulfill its educational duty in terms of its local community often involves creative thinking. At the Met, for example, the 200,000 schoolchildren who annually visit the museum on field trips leave with a pass to return with their entire family. "We want people to feel that this is their museum," says Deborah Winshel of this and numerous other community and educational outreach initiatives.

Thing she loves about her job: "We install new exhibitions on a regular basis. Every
six weeks my backyard changes."

John McCarter remembers visiting the Field Museum as a youth, and this is something he wants every child in the Chicago area to be able to experience. He has worked very hard to make school visits more effective — from furnishing teachers with lesson plans before they arrive, to building a special cafeteria to accommodate school groups, where three shifts of 450 students eat lunch almost every weekday. While McCarter is proud that the Field has increased the number of schoolchildren visits by 30 percent since 1996, he is not satisfied. "Our goal is to triple the number of visits by inner-city Chicago children," he says. "We have the power to be a great centralizing institution."

With fewer square feet, the MCA in Chicago cannot accommodate as many visitors as some of the larger institutions, but it has a strong tour program that brings in thousands of local schoolchildren. The MCA recently received the Arts & Business Council of Chicago's "On Target" award for its "Stir It Up" college outreach program. The museum also plays host to a teen apprentice program as well as an annual art exhibition for high-school students.

One of the five tenets of the mission at the Smithsonian's NMNH is to be a catalyst for the use of object-based science education in the K-12 school system. With a large education department that relies on close to four hundred volunteer docents, the NMNH runs four hands-on learning facilities, including the Discovery Room, where youngsters can touch a snake skin, model a Japanese kimono, or pet a ten-foot-tall stuffed polar bear. "This museum can be a powerful tool to keep kids interested in science," NMNH director Bob Fri observes.

Buildings and Upkeep

Many magnificent museums were built in the United States around 1900, and the initial "wow" factor that visitors experience when entering these buildings is often a partial reaction to the scope and beauty of their architecture. There is nothing like walking into the Field Museum in Chicago and meeting Sue, a 67-million-year-old T. rex dinosaur that is dwarfed by the museum's immense airy inte-rior, or experiencing the overwhelming scale of the Met's grand entryway. Not surprisingly, maintaining these enormous older structures can be a challenge, particularly when taking into account the precise climate requirements of the vast collections of priceless works on display and in storage. "It would be very easy to put all our money into repairing the heating, ventilating, and air-conditioning systems in this building," says John McCarter of his eighty-year-old facility.

Best part of his job: "Knowing that we are having an impact on kids' lives and doing important research on the environment."

While the Field has plans to build a new wing on a vacant plot nearby, the Met's main building on the Upper East Side in Manhattan has a fixed footprint. "We have to be very creative with our space," says Deborah Winshel of the 1880 central structure of the Met, which has newer wings that cover four city blocks. Whether it's eking out extra room from unused air shafts, building up, or renovating existing gallery space to make more efficient use of it, construction at the Met is almost nonstop, a fact that is complicated by the current New York City building boom.

Newer buildings pose their own set of challenges and rewards. J. Carter Brown (MBA 1958), former director of the National Gallery of Art in Washington, D.C., notes that when he embarked on expanding the Gallery, he first had to find a contractor who understood that the new building needed to last for centuries, not decades. The ten years that it took to conceive, plan, and build the East Building were well-spent, judging by the superb reception the I.M. Pei-designed structure has received, including its recent designation by Architecture magazine as one of the ten best buildings of the 20th century.

In Chicago, after completing a successful capital campaign, the MCA built a new home for its collection. Given that it is located in the center of a city known for its affinity for architecture, it is not surprising that the MCA's 1996 building is a spectacular structure that has increased the museum's visibility and visitorship. This light, open, and completely handicapped-accessible facility attracts tourists from around the world, and its signature fish-eye spiral staircase is a work of art itself.

The Outcome of Income

As leisure time dwindles in today's fast-paced society, the competition for getting people in the door of a museum has intensified. Admission fees and retail income from gift shops and food sales can have a significant impact on the museum as a whole. Because the Smithsonian's NMNH is located in the heart of one of the world's premier tourist destinations — the National Mall — it is not surprising that 80 percent of the museum's visitors are not from the D.C. metropolitan area. "Unlike other museums," observes Bob Fri, "we don't need to get on the treadmill of constantly changing our temporary exhibits in order to keep the ticket-buying public coming in." Still, the NMNH, which has opened a record five new exhibitions in Fri's two-year tenure, realizes that in order to keep its title as the most-visited museum in the world, it must continue to create new attractions.

Why he loves his job: "The people here are terribly talented, and magnificent things can happen when you marshal that talent around common objectives."

The Met's admissions policy is unusual: The museum, as Deborah Winshel puts it, "relies on the good grace of the visitor" for admissions revenue, with a suggested donation of $10 for adults. "We are a tremendous bargain," she says with pride. "That's something that I don't think will ever change. We are committed to the public. Anyone who wants to come here should be able to." In addition, unlike most of the nation's other large art museums, the Met does not charge an add-on fee for special exhibitions. Consequently, they are less likely to consider how popular an exhibition will be when determining whether to develop or host it.

As anyone who has recently visited a museum, or even an airport, knows, merchandising has also become an important source of revenue. Although some have cried foul when efforts have gone too far — as Professor Bill Poorvu observes, "you have to make sure you are a museum with a shop, not a shop with a bunch of paintings around it" — the reality is that the more dollars a museum brings in, the more it is able to spend on its collections, buildings, and educational programs. The Met and Field both have highly developed merchandising efforts, with satellite stores outside the museum and Web and catalog sales bringing in significant income.

Sensory overload can easily sap a museum-goer's energy, and taking a break from the collections to eat is often an effective method of rejuvenation. Thus, at the Field, John McCarter put in an open and comfortable café as well as a McDonald's where visitors can relax and have a reasonably priced meal. A few miles away at the MCA, Vicki Wilson notes that traffic in the museum and rental income from private events has increased since the museum opened Puck's, a café that capitalizes on the popularity of chef Wolfgang Puck.

Technology as a Tool

Advances in technology have changed museum operations, both internally and externally. Whether it's as simple as the software that helps organize collections or as complicated as live Web chats with scientists doing fieldwork, museums are now taking full advantage of new media. The NMNH's Bob Fri observes that "the Web experience is a lot like the museum experience: You come in, surf around until you see something that attracts your attention, and then drill down to find out more about that thing." Museums, he adds, "know a lot about how to make the most of technology as a learning tool."

What she likes most about her job: "Wonderful colleagues and the thrill of walking
through the Great Hall and galleries every morning on the way to work."

While an extensive Web site is a way to expand a museum's reach, it is also a marketing tool for getting visitors into the museum. "Our Web site is a promotional and educational tool," says Deborah Winshel of the Met's extremely comprehensive site. "We're hoping that it will entice people to come here, but it is not a substitute." She notes that the Met uses technology behind the scenes to improve the way it operates and offers a random-access audio guide to visitors, but she doesn't anticipate the museum incorporating technology into its actual exhibitions.

Conversely, as a museum of contemporary art, Chicago's MCA makes use of technology in many of its exhibitions. The recent "Virtual Encounters," for instance, offered visitors (both in person and on the Web) the opportunity to view interviews with artists, curators, and critics, while last year's "Transmute" gave Web users a chance to curate their own virtual exhibition using pieces from the MCA's collection.

John McCarter is happy to report that visits to the Field Museum's Web site are increasing dramatically — with well over two million expected this year. The Field has also branched out into distance learning with a program that reaches people who otherwise could not visit the museum. "We put a couple of curators in an exhibit and let them communicate live with kids," explains the enthusiastic McCarter, who reached more than five million kids with T. rex Sue's six-hour live Web-cast last May.

Sponsorship

The high cost of putting together a major exhibition increasingly requires that museums partner with sponsors. The bulk of sponsorships are corporate, and most corporations lend their name — and give their dollars — expecting merely to be associated with an exhibition. Professor Greyser, a member of the Boston MFA's Board of Overseers and founding chair of its Trustees Marketing Committee, recently taught a session in the School's Strategic Perspectives in Nonprofit Management executive program that focused on the MFA's partnership with Fleet in sponsoring the "Monet in the 20th Century" exhibition. Greyser attributes the success of this 1998 blockbuster — which was that year's most-attended special exhibition in the world — to the fact that the two partners communicated their expectations beforehand, had a separate and substantial budget for marketing, and created a single, integrated marketing program. "Not all partnerships will be of this scope," says Greyser, "but the size doesn't diminish the validity of this as a role model of excellent practice. Consumers saw a single campaign, not two related campaigns."

In Chicago, when John McCarter needed help financing an exhibition on the Dead Sea Scrolls, he found a surprising mix of funders. He received support from the Lilly Endowment as well as numerous religious organizations, including the Church of Jesus Christ of Latter-day Saints, the Sinai Congregation, the Jewish United Fund, the Fourth Presbyterian Church, and Chicago's Roman Catholic Archdiocese. McCarter relied on help from McDonald's and Disney to foot the $8.4 million price tag of the Field Museum's biggest attraction, T. rex Sue (see sidebar, page 33). He believes the key to partnering with others involves setting boundaries. "Every time I talk with a potential sponsor," he notes, "I explain that we are asking for financial support and involvement. And then I explain that we will decide on and own the intellectual content."

A Balancing Act

Carter Brown, who now chairs the cable television arts network Ovation and sits on the boards of some twenty nonprofit, public, and private institutions, observes, "You always have to be careful in donor situations, but you shouldn't overreact. You can't give up an opportunity to show a great collection, so you must figure out how to do it so that artistic integrity is maintained."

The balance between the artistic or content side of a museum and its financial side can sometimes be challenging. "A good director will be more than a pure bean counter," asserts Bill Poorvu. "Only looking at the financial picture can create real problems." Deborah Winshel at the Met agrees: "Our job isn't just to balance the budget," she says, "but to balance the budget while at the same time staying true to the mission." Indeed, adds Greyser, "successful museums — and other nonprofits — are not those that are market-driven but those that are mission-driven and market-sensitive."

One of the many talents for which Brown was praised during his 23 years as director of the National Gallery was his capacity for such balance. "Working to contribute to the value of the nation's cultural, intellectual, educational, and spiritual wealth is a very different thing from simply contributing to the gross national product," observes Brown. "You need to have a long-term vision that isn't focused on a bottom line or a number on the Nasdaq."

Those on the front lines agree that there are major benefits to working for an institution whose stakeholders are not shareholders. Bob Fri notes one such advantage when discussing the NMNH's opening of one of its newest exhibit halls. After several delays and despite a significant gap in financial support, the museum opened "African Voices" because it felt a responsibility to share this innovative presentation with the public. Fri is happy to report that "nonprofit institutions occasionally are able to do the right thing just because it is the right thing."

Back to School: Learning More about Nonprofit Management

Numerous museum directors and trustees have attended HBS executive programs targeted
to the nonprofit community, conducted as part of the School's Initiative on Social
Enterprise (ISE). The weeklong Strategic Perspectives in Nonprofit Management (next
offered in July 2001) is a leadership program for nonprofit CEOs and is cochaired by
Professors Stephen A. Greyser and James L. Heskett. Governing for Nonprofit
Excellence is a three-day program for nonprofit board leaders (next offered in
November 2001) chaired by HBS professor James E. Austin. Strategic Giving (next
offered in March 2001) is a three-day program geared to individual philanthropists,
cochaired by Jim Austin and offered jointly by the ISE and Harvard's Hauser Center
for Nonprofit Organizations. For more information, contact ISE at 617-495-6421 or
e-mail se@hbs.edu.